Risks Encountered During The Project Life Cycle

During the life cycle of the project it is likely that new risks may be encountered that had not been previously identified. Exhibit 2-4 is a sample list of such risks.

After a new project risk has been identified, the member of the project team who identified the risk should raise the issue to the person on the project team responsible for risk management, usually the project manager (PM). The PM should then review the risk to determine its validity and level of priority. The PM should then take the appropriate action to resolve the issue, if that action is within their capabilities. These actions are:

1. Identify and evaluate the risks.

2. Complete risk assessment form and log them into the risk management log.

3. Investigate project risks and develop alternative approaches.

4. Assess impact on cost, schedule, and project logistics.

5. Assess if there is any governing code considerations.

6. Obtain approval of the owner.

Exhibit 2-4

Sample risks encountered during the life cycle of the project.

Item

Included

Change in program or customer requirements. A sudden shortage in skilled personnel. A sudden shortage in construction materials. Unexpected project expenses and inflation of materials.

Poor performance on the part of a subcontractor, supplier, or vendor.

Failure of project equipment.

Significant accident at the project site.

Act of sabotage or terrorism.

Changing governmental authority requirements.

Surveyor errs with the wrong elevation or benchmark, which presents coordination conflicts beyond the control of the construction manager/

general contractor.

Coordination drawings are not completed prior to the work being installed, resulting in conflicts in the field.

Conflicts exist in the installation of major piping, conduits, ductwork, etc. that result in a significant change in the design concept of the project and routing of services.

Long lead items are not being produced in a timely manner by the equipment fabricator. Subcontractor purchased the wrong materials. Encountering poor subsoil or rock conditions, which are different from those anticipated. Encountering water not previously indicated. Encountering underpinning, bracing, and shoring problems with adjacent buildings due to unanticipated conditions. Jurisdictional disputes with unions workers. Poor quality control.

Exhibit 2-5 is a sample of a risk assessment form for identifying and managing project risks.

Exhibit 2-6 is a sample of a risk management log to log in risks when they are identified and classified on the risk assessment form.

The following guidelines should be used to complete the risk forms for a construction project:

1. The risk form provides a complete description of the risk identified.

2. The likelihood of the risk is rated as its probability of occurrence.

Project Name: Risk ID:

Number in the log, often year, followed by project number and item number, e.g., 2008-017-00

Exhibit 2-5

Risk assessment form.

Classification: Report Date:_

(The date the risk was reported)

Risk category: high, medium, low, recurring, nonrecurring _Reported By:_

Probability:_ Impact:_

What is the likelihood of this risk adversely affecting the contractor?

What is the damage if the risk becomes real?

Risk Exposure_

Multiply probability times loss to estimate the risk exposure and potential cost.

First Indicator:

First Indicator:

Mitigation approach:

Mitigation approach:

State one or more approaches to control, avoid, minimize, or otherwise mitigate the risk. Mitigation approaches may reduce the probability or the impact.

Date Started:

State the date the mitigation plan implementation was initiated.

Date to Complete:,

State the date by which the mitigation plan is to be implemented.

Person Responsible: Current Status:

Assign each risk mitigation action to an individual for resolution.

Contingency Plan:

Describe the status and effectiveness of the risk mitigation actions.

Describe the actions that will be taken to deal with the situation if the risk factor develops into a problem.

Trigger for Contingency Plan:

State the conditions under which the contingency plan will begin to be implemented.

Signed:

Exhibit 2-6

Risk assessment form.

CSI CODE

SUBDIVISION

HAZARD IDENTIFICATION

RISK PRESENCE YES/NO

RISK ASSESSMENT (HIGH, MEDIUM, OR LOW) FREQUENCY

RISK ASSESSMENT (HIGH, MEDIUM, OR LOW) SEVERITY

RISK CONTROL PLAN

3. The impact of the risk is rated as the Frequency of Exposure to Hazard X Severity of the Outcome X Probability of Occurrence = Impact to Project or Degree of Risk.

4. A list of actions needed to prevent the risk from occurring is recommended.

5. Contingency actions should be listed to minimize the impact on the project should the risk actually occur.

6. The completed risk form should be immediately sent to the PM for review and follow-up action with upper management if appropriate.

It is important that the PM be given not only the responsibility, but also the authority to go with it, to act on all items and matters that can adversely affect the project. Remember that time is money, but money does not always buy time. It is therefore of utmost importance to identify, react, and resolve matters in a timely manner. You cannot expect the PMs to be able to do their jobs if they do not have the control of the resources, that is, the money, personnel, equipment, and systems, to resolve it.

Health, Safety, and Environmental Risks

During the construction process, the CM/GC will often encounter various health, safety, and environmental issues on a project. Each of these issues presents potential risks to the CM/GC and the overall project. Exhibit 2-7 is a summary of health, safety, and environmental risks for a project.

Construction Defects as Potential Risks

Construction defects are sometimes encountered which present potential risks to the CM/GC and the overall project. These risks are summarized in Exhibit 2-8.

Item

Included

1. Workers may be exposed to hazardous materials such as:

• Silica or concrete dust

• Hazardous waste, such as petrochemical products, medical waste, and industrial waste

• Contaminated soil

• Fumes from torches used for cutting and welding

• Fumes from paving, asphalt and tar products

2. Workers may be exposed to the following types of activities:

• Working in a confined space

• Demolition with a lot of dust, debris, and sharp objects

• Excavation and trenching

• Heavy lifting of steel, concrete, curtain wall, or miscellaneous metals

• Lockout of electrical and mechanical equipment

• Working on mechanical and electrical equipment while it is operating

• Working near heavy equipment such as cranes, derricks, scaffolding, and hoists

• Working near drilling, chipping, and blasting of rock

3. Construction workers may work in the following environmental exposures:

• Cold or hot extremes of temperatures

• Laser equipment

• Noisy equipment

• Equipment with ionizing radiation

• Ergonomically difficult or unnatural

• Aerial lifts, ladders, personnel hoists, scaffolding, scissor lifts, and platforms suspended off the ground

4. Construction workers will utilize tools and equipments such as:

• Compressed gas cylinders

• Electric power tools

• Powder actuated tools

• Rigging equipment

• Temporary heating systems

• Respiratory protection

• Heavy equipment and motors

Exhibit 2-7

List of health, safety, and environmental risks.

Exhibit 2-8

Sample construction defects as potential risks.

Item

Included

1. Material deficiencies

2. Poor quality or substandard work

3. Subsurface or geotechnical problems

4. Defects in wall systems such as shear failure, drag failure, cracks, settlement, water infiltration, inadequate framing, and break in the piping within a wall cavity

5. Floor or ceiling defects such as inadequate support, excessive spans, overloading during construction, undersized framing members, rotting of the structure, cracking, water intrusion, and excessive sloping

6. Defects in decks and balconies such as improper deck-to-wall transitions, threshold transfers, improper coatings and finishes, improper flashing, use of improper materials, and lack of protection during the installation process

7. Roofs defects such as improper installation, improper flashing, improper slope, improperly installed gutters and drainage systems wet insulation, wet substrate below the roof, deteriorated substrate materials, and lack of protection during installation

8. Window and doors defects such as improper installation, improper anchorage, improper flashing, water infiltration, corrosion of materials, use of dissimilar materials, trapped moisture during the installation process, and breaking of the seal on insulated glass units.

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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